Pandora is an internet radio provider that was launched on July 21, 2005. It provides subscribers with music streaming and music recommendations based on user preferences. As of December 31, 2016, Pandora had 81 million active users.
Since its launch, the company’s revenue has greatly increased. As of 2007, Pandora’s revenues from all sources totaled 4.18 million US dollars. By the completion of the fiscal year ending on December 31, 2016, Pandora had earned total annual revenues of 1.38 billion. Of that total, 1.07 billion U.S. dollars were generated through advertising sales alone, accounting for roughly 81 percent of revenues that year. Given that Pandora could count only an estimated 4.21 million paying subscribers in 2016 —most Pandora listeners make use of Pandora’s free music streaming services— it follows that subscription fees did not account for a greater share of revenue. In 2016 alone, Pandora radio reportedly paid 734.35 million U.S. dollars in royalty fees.